The political budget cycle (PBC) literature argues that governments expand deficits in election years. However, what happens when an economic downturn is expected? Will the government allow the deficit to expand even further, or will it resort to spending cuts and tax increases? When voters...

Florian Dorn erstellte diesen Beitrag während seines Promotionsstudiums an der Universität München (LMU). Die Studie wurde im September 2020 abgeschlossen und von der Fakultät für Volkswirtschaftslehre als Dissertation angenommen. Die Dissertation trägt zur Empirie der Ökonomie des...

This paper describes the political economy of shadow banking and how it relates to the dramatic institutional changes experienced by global capitalism over past 100 years. We suggest that the dynamics of shadow banking rest on the distributive tension between workers and firms. Politics wedge...

This paper estimates the causal effect of fiscal rules on political budget cycles in a sample of 67 developing countries over the period 1985-2007. We exploit the geographical pattern in the adoption of fiscal rules to isolate an exogenous source of variation in the adoption of national fiscal...

We investigate whether private information about citizens' competence in political office can be revealed by their entry and campaign expenditure decisions. We find that this depends on whether voters and candidates have common or conflicting interests; only in the former case can entry be...

We examine whether fiscal rules constrain incumbent governments to use fiscal policy for re-election purposes. Using data on fiscal rules provided by the IMF for a sample of 77 (advanced and developing) countries over the 1984-2015 period, we find that after the Global Financial Crisis political...

The literature on political budget cycles, i.e. fluctuations in the budget balance during elections, largely assumes governments to be unitary actors. However, in many political systems, political parties share governing responsibility in a coalition. This article examines the intra-coalition...

A long-standing issue in political economics is whether party control makes a difference in determining fiscal and economics policies. This question is very difficult to answer empirically since parties are not randomly selected to govern political entities. This paper uses a...

Although pre-electoral political manipulation of the budget --- the political budget cycle (PBC) --- has been long investigated by scholars, empirical findings are mixed at best. This is partly because of the non-random nature of election timing. There also exist ongoing debates over how the...